Italian coil downturn continues

The deadlock continues in Italy’s cold rolled and hot-dipped galvanised coil markets, with demand remaining sluggish and prices on a downward trajectory, Kallanish notes.

Service centres are refusing to buy, apart from very low volumes from stocks. Some sales are being done with end-users but still for low volumes. Customers are delaying receipt of material and many are asking to review old orders agreed at higher prices. Stocks at service centres are said to be particularly high. At present, they are receiving material paid at much higher prices but are selling at today’s reduced values, which is causing negative market sentiment and low consumer confidence.

Some end-users and large service centres are using temporary layoff schemes to try and contain the financial damage of the current coil price collapse. Producers are quoting August and September lead times but their customers have very low visibility into their future orders and virtually no orders for September. Meanwhile, Italian hot rolled coil values are reported to have fallen to the level of €800/tonne ($842/t) base ex-works.

HDG is reported at €1,020-1,050/t base ex-works, with CRC starting at €1,000/t. Some producers are still asking for €1,100/t base ex-works, sources suggest.

This deadlock is forecast to continue through the summer, given the high stocks at service centres and end-users. Some sources are less pessimistic and see a little demand coming back to the market before the August maintenance stoppages.

Natalia Capra France